A(n)________ is a contract entered into with a bank in which the firm and the bank agree to exchange coupons from two different types of loans.
A)interest rate swap
B)hedge
C)call
D)put
E)futures contract

Question

Quizplus · Accepted Answer

An interest rate swap is a financial contract where two parties agree to exchange interest rate cash flows based on a notional principal amount. In this case, the firm and bank agree to exchange coupons from two different types of loans, which is an example of an interest rate swap. The other options, hedge, call, put, and futures contract, do not accurately describe this type of contract.

A(n)________ Is a Contract Entered into with a Bank in Which